This article is from the Australian Property Journal archive
MULTINATIONAL packaging manufacturer and supplier, San Miguel Yamamura’s eastern Melbourne industrial home has hit the market during a period of heightened demand for warehousing assets.
It is believed a figure of $20 million is anticipated from the sale of 117-121 Lewis Rd in Knoxfield.
The asset is being offered through Dawkins Occhiuto agents Walter Occhiuto and Chris Jones, with Transcend Property as transaction manager, via expressions of interest on behalf of Sydney investor James Knox.
San Miguel subsidiary Cospak has a 10 year lease that returns net income of $1,048,721 per year on completion of the current expansion of the asset. It comprises 6,343 sqm of office and warehousing, with an additional 3,500 sqm warehouse expansion soon to be completed, on 17,789 sqm of land.
An adjoining parcel of 976 sqm, at 84 Parkhurst Dr, leased to antique store Hidden Portal provides a second street frontage and future development flexibility.
Established in 1969 as Bottle Containers Pty Ltd, Cospak forms part of San Miguel Yamamura Australasia Group (SMYA), a joint venture between San Miguel Corporation of the Philippines and Nihon Yamamura Glass of Japan.
Occhiuto said the property presents one of the few remaining large landholdings within a supply-constrained precinct.
“This is a property which provides investors with a strong and immediate income stream on the back of a WALE of 9.5 years chiefly to a blue chip tenant, but one which also provides an outstanding value-add outlook with the ability to fully explore the property’s rezoning potential.”
The precinct has a limited and diminishing supply of employment land that has historically kept vacancy rates low, he said. It is close to Westfield Knox, hospitals, schools and universities.
He said the expansion of the building and new 10 year lease demonstrated the tenant’s commitment to the precinct having been in occupation since 2001.
Jones said the scarcity of long term and quality investment product across all asset classes was reflected in strong demand for industrial assets and, in some areas, yield compression despite current economic conditions.
“In what has been the most challenging market bar none, industrial property has maintained its ground and improved its status as one of, if not the most sought after, commercial property investment sectors.”
Warehousing and logistics assets have been the most popular, he said, but demand has also been driven by traditional property fundamentals of location, lease term, tenancy profile and upside.
